President Trump’s proposal to distribute $5,000 to every American adult if the GOP retains control of Congress in the midterm elections would expand the federal deficit, trigger inflation, and unsettle investors, according to economic analysts. Following Mr. Trump’s announcement at the Republican National Committee’s midterm convention, Vice President JD Vance stated on Fox News that the middle-class payments would be funded by administration tariffs. However, Tax Foundation senior economist Erica York noted that current tariffs generate about $125 billion annually, which falls far short of the $1.25 trillion needed to cover the nation’s roughly 245 million adults. Because tariff income would be insufficient, the government would likely need to issue debt, potentially lifting the federal deficit to $3 trillion. Experts warned that the cash infusion would mirror pandemic-era stimulus checks by fueling consumer spending and reigniting inflation. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, called the proposal fiscally dangerous. Meanwhile, White House spokesperson Davis Ingle defended the president, stating that Mr. Trump has consistently proven skeptics wrong. With national debt recently exceeding $40 trillion, financial analysts cautioned that investors would demand higher Treasury yields, subsequently driving up consumer borrowing costs for mortgages and auto loans. While Wall Street largely views the plan as unlikely to win congressional approval, President Trump asserted in an exclusive interview with CBS News Texas that legislative sign-off might not be necessary.
Source: cbsnews.com
